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Twitch "isn't profitable" admits CEO, in wake of recent layoffs
(www.eurogamer.net)
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this post was submitted on 12 Jan 2024
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Technology
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So little of our modern internet is realistically profitable in the long term. Same with other big segments of tech.
They exist do to this notion of “ if we just get the user base and replace this old thing with our new thing, we can then monetize later.” They think they are successful because their new services is more innovative or better than existing services, some times they are, but people don’t use them because of that. People use these services because they are cheap, free, or convenient.
If you try and charge for the real cost of operations, or monetize in some other way (basically all options here make it less convenient or hurt UX), people wouldn’t use them. Ether they have to keep operating at a loss or lose their dominant market position and survive on captive audiences.
Modern tech is an oroborous of investors subsidizing the new guy to dethrone the old guy. But this only works so long as there is investor cash available to subsidize all this stuff, and that’s starting to dry up because of shifts in the world market. Labor shortages forcing industry to substitute capital for labor, meaning they’re competing for capital with tech, for example.
The biggest for profit platforms are getting worse and more hostile to users/content-creators in an attempt to turn a profit, nothing new there, but now there is way less money to fund cheap convenient new start ups to replace them as they die off. If I had to wager a guess, much more basic, less feature rich, and cheaper to operate alternatives are going to start eating the lunch of these platforms.
Some of it maybe new start ups that just don’t have the funding to develop their platforms beyond the bare minimum people will accept, some might be community organized projects that are run by volunteers and donations, see Wikipedia. Maybe decentralized interoperable systems where the capital and labor can be distributed over a larger number of willing parties.
Ether way we’re going to see a lot of blood in the water over the next few years.
The sad thing is that if all these investors, finance bros, and tech bros actually paid their taxes and paid their employees decent salaries, so that income and wealth inequality was lower and more people had more money than barely enough to live on... people would have spare money that they might actually spend on things like better services that have fees attached. People use the free, cheap, convenient options because they don't have the time or money to spend on the higher quality ones, since the vast majority of internet services are luxuries, not essentials. No one's going to pay for Twitch if they're spending all their money on ridiculous things like food and rent. The best way to make the internet profitable is, in fact, to redistribute wealth away from the investors, finance bros, and tech bros who are so desperate for the internet to be profitable.
See, the problem is that if they did that, then there would be far less incentive to work at the soul sapping companies they own.
After all, who would choose to take a job at a company where you push ~~heroin~~ pain killers on economically distraught communities, if you were not also threatened with being relegated to the same desperate conditions? Who would willing make purposefully addictive Skinner box games and social media sights, if they were not threatened with homelessness and depersoning for failing to pay their 2000 dollar a month rent?
How could they possibly ever get people to do these kinds of absolutely necessary jobs if there wasn’t an unspoken threat of starvation, death and violence hanging over everyone’s head. I mean they’d not be able to make all the money that they then hoard.
This has been the case since at least the .com bubble (and subsequent crash) in the late 90s to early 2000s. Even now, 25 years later, things haven't changed much.
The main monetization strategies are still either to:
There's a newer third option but it's mostly for smaller services:
It's part of the reason why I think decentralized services could be the future. Lemmy or Mastodon can have a lot of small servers with reasonable costs spread across many admins, instead of one centralized service that costs a significant amount to run.
Ohh, absolutely, or rather, it is the past. I mean, internet was built that way, as a resilient federation of networks and protocols. Lemmy could be seen as us just rediscovering emails after the tech giants almost succeeded in killing it. We should approach all the services we use by asking ourselves basic sustainability questions:
is that thing opensource?
self hostable?
does it federate/interoperate with equivalent services?
can I pull my data out of it/relocate to another provider on a whim?
if not, is this a trustworthy and ethical business?
is it profitable?
are there open financial records available showing where/for what the money is going?
is it at risk of being acquired?
is it subject to foreign/unlawful interference
Etc Etc
Exactly! I miss those days, where search engines mostly returned small websites with useful info.
This is actually kinda tricky with ActivityPub-based services like Lemmy and Mastodon. Sure, you can move provider, but you lose your original username since usernames are tightly coupled to the instance you're using.
BlueSky's approach is better. Currently they're the only provider using their protocol, but they have plans to decentralize. You can use your own domain as your username, regardless of which provider you use. If you move provider, your username can move with you, you just need to update some DNS records to point to the new provider.